Crude oil prices to rise by year-end – EIA

The US Energy Information Administration (EIA) Short-Term Energy Outlook (STEO) for August 2024 projects the Brent crude oil spot price will rise to between $85 and $90 per barrel by the end of 2024, following a recent dip to $81 per barrel.

This increase is attributed to reduced global oil inventories, partly due to OPEC+ production cuts. However, the 2025 forecast for the annual average Brent price has been adjusted downward to $86 per barrel due to decreased oil consumption.

Global oil consumption, on the other hand, is expected to grow by 1.1 million barrels per day (b/d) in 2024 and 1.6 million b/d in 2025, a reduction from previous forecasts, primarily due to slower economic growth in China. Moreover, Jet fuel consumption in the US is anticipated to increase by 3 per cent annually through 2025, surpassing pre-pandemic levels by then, likely driving up jet fuel prices.

Natural gas prices at Henry Hub are forecasted to remain below $2.50 per million British thermal units (MMBtu) through October, but may rise to about $3.10/MMBtu from November to March due to increased heating demand and LNG exports. Residential electricity prices are expected to rise by about 1 per cent this year, reflecting lower natural gas costs.

Forecast changes include a slight reduction in global liquid fuels consumption growth for 2025 and a decrease in Brent crude oil price projections.

Attribution: EIA Short-Term Energy Outlook (STEO)